ACIT 5(1), MUMBAI V. GAGAN TRADING COMPANY, MUMBAI

ITA 6104/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75453 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Keywords: Notional interest

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI . . , ! '#$% , & ' BEFORE SHRI B.R. MITTAL, JM AND SHRI N.K. BILLAIYA, AM ./ I.T.A. NO.6104/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR : 2008-09 THE ACIT-5(1), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. GAGAN TRADING CO. LTD., JINDAL MANSION, 5-A, DR. G DESHMUKH MARG, MUMBAI-400 026 ./ I.T.A. NO.6587/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR : 2008-09 M/S. GAGAN TRADING CO. LTD., JINDAL MANSION, 5-A, DR. G DESHMUKH MARG, MUMBAI-400 026 / VS. THE ACIT-5(1), AAYAKAR BHAVAN, MUMBAI-400 020 ) & ./ * ./ PAN/GIR NO. : AAACG 1829Q ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . / REVENUE BY: SHRI R.K. SAHU ,-)+ / . / ASSESSEE BY: SHRI HIRO RAI / 01& / DATE OF HEARING : 23.01.2014 23( / 01& / DATE OF PRONOUNCEMENT:29.01.2014 4 / O R D E R ITA NOS. 6104 & 6587/M/11 2 PER N.K. BILLAIYA, AM: THESE CROSS APPEALS BY THE REVENUE AND THE ASSESSE E ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-9, MU MBAI DT.29.6.2011 PERTAINING TO A.Y. 2008-09. AS BOTH THESE APPEALS INVOLVED COMMON ISSUE, THEY WERE HEARD TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO. 6104/M/2011 REVENUES APPEAL ITA NO. 6587/M/2011 - ASSESSEES APPEAL 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DIRECTING THE AO NOT TO TAKE THE NOTIONAL INTERES T ON INTEREST FREE DEPOSIT WHILE COMPUTING THE LET OUT VALUE OF THE PROPERTY F OR COMPUTATION OF INCOME FROM HOUSE PROPERTY. 3. FACTS ON RECORD SHOW THAT THE ASSESSEE HAS TAKEN INTEREST FREE DEPOSIT OF RS. 78,00,000/-. THE ASSESSING OFFICER ADDED THE NOTIONAL INTEREST @ 18% ON THIS SECURITY DEPOSIT AND COMPUTE D THE INCOME FROM HOUSE PROPERTY AT RS. 14,04,,00,000/- . THE SAME W AS COMPUTED BY THE LD. CIT(A) AT RS. 1,05,06,720/- AS AGAINST RS. 2,54 ,400/- RETURNED BY THE ASSESSEE. 4. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE STATED THAT THE ISSUE IS NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2002-03 IN ITA NO. 6504/M/05, FOR A.Y. 2005-06 IN ITA NO. 2429/M/08 AND FOR A.Y 2 006-07 IN ITA NO. 4088/M/2010. ITA NOS. 6104 & 6587/M/11 3 5. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED STRON G RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS MIRACLE EXPORTERS PVT. LTD. 333 ITR 38 AND JHARKHAND HIGH C OURT IN THE CASE OF CIT VS SHRIMATI BHAGWANI DEVI 298 ITR 413. 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE. WE FIND FORCE IN THE CONTENTION OF THE LD. AR. THE ISSUE IS FULLY COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSE ES OWN CASE AS MENTIONED HEREINABOVE. WE FIND THAT IN ITA NOS. 40 88/M/10 AND 4657/M/2011 FOR A.Y. 2006-07, THE TRIBUNAL AT PARA- 10 ON PAGE-8 HAS HELD AS UNDER: IN OUR OPINION, THE SIMILAR ISSUE AS INVOLVED IN T HE PRESENT CASE THUS HAS BEEN DECIDED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN FAVOUR OF THE ASSESSEE IN THE CASE OF R ECLAMATION REALITY INDIA PVT. LTD. (SUPRA) AND SINCE THE SAID DECISION HAS BEEN RENDERED BY THE TRIBUNAL RELYING ON AND FO LLOWING THE JUDGEMENTS OF HONBLE APEX COURT AND THE HONBL E JURISDICTIONAL HIGH COURT, WE ARE OF THE VIEW THAT THE JUDICIAL PROPRIETY AND JUDICIAL DISCIPLINE REQUIRE US TO FOLLOW THE SAME. ACCORDINGLY, RESPECTFULLY FOLLOWING THE SAID JUDICIAL PRONOUNCEMENT, WE MODIFY THE IMPUGNED ORDE R OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO A CCEPT THE INCOME FROM HOUSE PROPERTY DECLARED BY THE ASSESSEE ADOPTING THE MUNICIPAL RATABLE VALUE AS ANNUAL LETT ING VALUE OF ITS PROPERTY. GROUND NO. 1 OF THE ASSESSEES AP PEAL IS ACCORDINGLY ALLOWED WHEREAS THE SOLITARY GROUND RAI SED IN THE REVENUES APPEAL IS DISMISSED. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDI NATE BENCH, REVENUES APPEAL IS DISMISSED AND ASSESSEES APPEAL IS ALLOWED. ITA NOS. 6104 & 6587/M/11 4 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2014 . 4 / 3( & 5 67 29.1.2014 3 / 8 SD/- SD/- (B.R. MITTAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER & / ACCOUNTANT MEMBER MUMBAI; 6 DATED 29.1.2014 . . ./ RJ , SR. PS 4 4 4 4 / // / ,0' ,0' ,0' ,0' 9 '(0 9 '(0 9 '(0 9 '(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. ';8 ,0 , , / DR, ITAT, MUMBAI 6. 8< = / GUARD FILE. 4 4 4 4 / BY ORDER, -'0 ,0 //TRUE COPY// > >> > / ? ? ? ? (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI